Dear Friends,
It seems to me, legalists think in terms of punishments while moralists think in terms of incentives. The carrot and the stick principle applies to both, but which is predominant depends on ideology. Legalists believe all human behavior can be controlled by the stick. Use it frequently enough and hard enough, and those subject to it will learn to listen. They don’t utterly abandon incentive as motivator, but keep it strictly to grift. Meanwhile the moralist believes more in incentives as a means to improve the lot of mankind. The carrot is his or her go-to. The stick must be used for the psychopaths and such who are unable to control themselves, even for their own good. This is where the two ideologies differ. The one uses the stick, the other the carrot.
The stick is quite effective in the short term. A child who has never felt a belt across his back of his legs is shocked, horrified, and humiliated. The action that precipitated it is unlikely to recur. The child who feels it every day… not so much. This means that if used too often the belt loses its effect. Nations are no different. Once punishment and enforcement have become arbitrary and extractive, following the law is self-destructive. It’s like a drunken father who beats his kids every night. The kids learn that punishment is a way of life, and not a thing to channel actions into a more productive pattern. So, when the rulers of a nation only use the lash the people get used to it and try to get around every law, rule, and regulation, as a self-interested act.
Laws that have replaced morals once they become arbitrary, they are not followed. This is because they can’t be followed. I can explain this by… the reason ignorance of the law is no excuse under the law is because no one can know all the laws. Even those trained in law must specialize. Moreover, the canon of law in the US alone grows too fast for even AI to keep up. So, dutifully following the law is no longer an option. The more self-interested option becomes to hide from it as best we can. This is another reason why the lash fades in ability to control. The very act of overuse of law, and thus the lash, corrodes its effect. People no longer associate the lash with punishment but from a drunken father taking out his frustrations at his own ineptitude and failure.
Incentives on the other hand are very powerful motivators of human beings. Indeed, the more they are used the more effective they become. This is why the free market succeeds while central planning fails, because central planning is all about punishing. The free market, however, is all about incentives. I firmly believe that people are self-interested. We may or may not know where our actual self-interest lies, but we always try to act on it. (Other than martyrs). So, if the incentive structure is such that there are multiple paths to success, a multitude of people will tread them, willingly and happily. Not because they are manipulated but because they choose self-interest over the lash. This explains why the lash can never replace incentives. Schumpeter was wrong.
Schumpeter, in his famous book, Capitalism, Socialism, and Democracy, in the socialism section said the lash can replace incentives. In doing so he both refuted socialism, in saying it needs the lash, and made an error in logic. The more the lash is used, the more it must be used, and the more it is overused, the less effective it becomes. Until it becomes background noise. A drunken father’s ranting. The right way to set up a system then is to exploit Adam Smith’s invisible hand and self-interest. Embrace the carrot and keep the stick for those who need it. In other words, give everyone a path to success, and that path will quickly become an interstate highway. For the same reason gold rushes happen. People will run to success… but whipping them to it seldom succeeds.
Sincerely,
John Pepin
